You’ve found the ideal US ETF, but it’s not available in the UK. While it is feasible to register an account with a US broker if you live in the UK, you will be refused access to US-listed ETFs (even if you are a US citizen) due to the regulation’s “extra-judicial reach.”
Can foreigners own US ETFs?
Foreign investors are permitted to purchase mutual funds in the United States. If a foreign investor chooses to execute their acquisition through an American brokerage business, they must first register with the IRS.
Can I invest in US equities from the United Kingdom?
UK investors may buy US stocks easily from within the UK, but it might be perplexing at first. This handy guide explains how it works and clears up any ambiguities.
Yes, it is feasible to purchase US equities from the United Kingdom. Non-residents of the United States are allowed to invest in US stocks. While US stock markets are governed by American laws, you do not need to be an American to invest in them. You can, for example, be British and invest in America by purchasing American equities. Other investments, such as US government or corporate bonds, as well as US real estate, are similarly affected.
The stock market in the United States is the largest in the world, and it may contain some of the most popular equities to trade. For foreigners, investing in the United States provides diversification, offering your investment portfolio ‘global market exposure,’ albeit keep in mind that trading is dangerous and not suitable for everyone.
To buy US equities, you don’t need to open a brokerage account in the United States. British residents can open accounts with UK banks and brokers to acquire US stocks and other financial products.
LCG charges only 2-4 cents per share for trading in hundreds of US equities and ETFs listed on the New York Stock Exchange, Nasdaq, and BATS.
All of this may be done with the LCG app or desktop trading platform.
On the New York Stock Exchange and Nasdaq, some of the most popular equities to buy tend to be the largest.
Investing in an index such as the S&P 500 or Dow Jones Industrial Average is another option for British investors looking to buy US stocks. This can be accomplished by purchasing a US index fund, an index ETF, or CFDs on indices.
NOTE: Pink sheets and US small cap companies have very limited liquidity, are potentially volatile, and are considered high-risk investments. They are not acceptable investments for most investors, and are typically not available through large UK brokers. Furthermore, you will be exposed to exchange rate risk when purchasing stocks denominated in currencies other than your home/base currency.
Can I invest in US exchange-traded funds (ETFs)?
The market capitalization of the five largest US-domiciled ETFs is greater than that of the whole European ETF market. You can keep or sell any US-domiciled ETF you already possess, but you won’t be able to buy more until a PRIIPs compatible KID becomes available.
Can Europeans own US ETFs?
In most circumstances, however, European investors can still invest in ETFs and ETNs listed in the United States, though they will need to locate a broker other than their home broker to do so.
Vanguard is available to non-US nationals.
Each of the investment products and services mentioned on this website is intended for use by residents of the United States. This website is not intended to be a solicitation or offer for any investment product or service in any jurisdiction where such solicitation or offer would be illegal. International visitors are encouraged to visit Vanguard’s Global Investors site for further information on the goods and services available to them.
How can I trade from the US to the UK market?
The American Internal Revenue Service requires a W-8BEN form before an individual can buy US stock (IRS). As a result, the second step in purchasing US stocks in the UK is to complete this form. There is no need to download anything; it may all be done on our web platform. The W-8BEN is used to verify that you are not a US resident. It allows us to process an individual tax benefit on your behalf – a reduction of up to 30% in the amount of US tax you pay on profits from US stocks you acquire.
Is Hargreaves Lansdown a good place to buy US stocks?
After you’ve created an account, the following step is to decide which stock you wish to purchase. Most US stocks, like UK stocks, can be purchased online.
Do you have to pay UK tax on US stocks?
So far, everything has gone well. The problem is that many nations already withhold more than the amount specified in the double taxation agreement.
For a selection of nations, the table below illustrates the regular dividend tax rates and the maximum rate that should be levied to UK residents. (It’s worth noting that in some circumstances, such as Singapore, the real rate is lower than the maximum allowed by the double taxation treaty.)
These are taken from Dow Jones and Deloitte tables, among others. The estimates have a few inconsistencies, so I went with what appears to be the most frequent in other sources. If you’re looking for more nations, the tables and HMRC’s list of agreements include most of the important ones listed.
The amount exceeding the withholding tax rate, however, cannot be offset against UK tax. If the double taxation treaty specifies a 15% withholding rate for UK citizens, but the country withholds 25% on a regular basis, you can only deduct the 15% against UK tax.
You must recover the excess from the tax authorities in the appropriate country in order to receive it. You’ll wind up paying more tax than you need to if you don’t.
For a small number of nations, you can make things easier by informing the tax authorities that you are a resident of a country with a lower withholding tax rate. This will ensure that your dividends are taxed at source in accordance with the UK double taxation treaty’s approved withholding tax.
The most notable example is the United States, where the default tax rate is 30%, whereas the rate for UK residents is 15%.
If you file form W-8BEN, the withholding tax on your dividends will be lowered to 15%. When you open an account with a broker that allows you to trade US equities, most brokers will ask you to do this automatically.
The majority of other countries are more difficult to deal with. In many circumstances, you’ll have to reclaim the tax you overpaid after the fact. This can be a real pain in the neck.
In principle, much of this should be handled by your stock broker. In actuality, they may not be able to do so, or may only be able to do so for a limited number of nations. And, given the cross-jurisdictional complexities involved, they may be much less likely to do so if you create a brokerage account in a foreign country.
If your broker is unable to assist you, you may wish to contact the custodian of your shares or the depositary bank responsible for issuing ADRs and GDRs, if you hold your shares that way. These businesses can be useful at times and not at others.
There are also specialized companies that will do the work for you, at least when dividends are paid from large countries like the United States, France, or Germany. Although there will be a fee, it may still be worthwhile. However, many of these agencies have received unfavorable feedback, so do your research before signing up with one.
You might also attempt to manage the paperwork on your own. Forms to reclaim withholding tax for a number of major nations can be found here. Alternatively, you may find it easier to engage a good accountant or tax expert to perform the work for you.
Of course, the most straightforward solution is to strive to minimize tax revenue in the first place. Focus on countries with minimal or no withholding tax on dividends, or those with the simplest reclaim procedures.
Also, think about which overseas equities to put in an ISA or SIPP to gain the maximum tax benefits. These vehicles will not provide you with further withholding tax relief (unless in a few situations where a SIPP is entitled to additional WHT reductions and the administrator implements this), but they will allow you to hide overseas income and capital gains from additional UK tax.
The best way to do this depends on your specific tax situation. If you don’t want to crunch all the numbers yourself, a qualified accountant or tax adviser may be able to help you make your portfolio more tax efficient.
Is ARKK available in the United Kingdom?
Because ARK has not produced key information documents (KIDs), it will be difficult for UK traders and investors to purchase ARK ETFs. As a result, its exchange traded funds (ETFs) are not available in the UK. However, you can trade or invest in ETFs that aren’t from ARK, and we offer a variety of similar ETFs on our platform.